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[Official Guidance]

Text of PBGC Requests for Information: Requests for Approving Certain Alternative Methods for Computing Withdrawal Liability; Settlement of Withdrawal and Mass Withdrawal Liability
"This is a request for information (RFI) to inform PBGC on issues arising from arrangements between employers and multiemployer plans involving an alternative 'two-pool' withdrawal liability method. PBGC seeks information from the general public and all interested stakeholders, including multiemployer plan participants and beneficiaries, organizations serving or representing retirees and other such individuals, multiemployer plan sponsors and professional advisors, contributing employers, unions, and other interested parties about these arrangements, including the various forms these arrangements may take, the terms and conditions that apply to new and existing contributing employers who enter into such arrangements, and the benefits and risks these arrangements may present to multiemployer plans and their participants, employers, the multiemployer pension insurance program, and other stakeholders in the multiemployer system."
Pension Benefit Guaranty Corporation [PBGC]

[Advert.] FREE Webcast: Practical Guide to ERISA Research

Sponsored by Burrmont Compliance Labs LLC

Join us as Ilene Ferenczy, JD and Tim McCutcheon, JD give an insider's perspective on how to find answers to your qualified plan compliance questions. Register here for this FREE webcast and earn 1 hour CE credit. Date: Thurs. Jan 26. Time: 2 pm (ET)

[Guidance Overview]

Inherited IRAs: What Owners and Beneficiaries Need to Know
"Since first developed more than 40 years ago, [IRAs] have become a popular retirement savings vehicle for generations of investors. As time marches on, a new generation of IRA investors is emerging -- one that has inherited, or will inherit an IRA from a parent, spouse or other person. FINRA is issuing this alert to inform brokerage account holders, family members and other beneficiaries about inherited IRAs. We also provide tips for making the IRA inheritance process as efficient and trouble-free as possible."
Financial Industry Regulatory Authority [FINRA]

Multiple Recordkeepers at Heart of Excessive Fee Suit
"The case contains many of the elements that have become wearingly familiar ... But it also is distinct because of the history of the two retirement plans ... including a 403(b) plan that has some important distinctions from a typical 401(k).... Plaintiffs argue the size of a defined contribution plan, both by number of participants with balances and total assets, should directly determine the pricing it can obtain for administrative services and investment management. 'By combining administratively, the plans have had the ability to operate in the market as a 20,000-participant plan with $1 billion in assets,' plaintiffs suggest." [Morin v. Essentia Health, No. 16-4397 (D. Minn. complaint filed Dec. 29, 2016)]

2017 Key Administrative Dates and Deadlines for Calendar-Year Single-Employer Defined Benefit Plans
Chart lists and describes important administrative dates and deadlines for single-employer defined benefit plans subject to ERISA and the Internal Revenue Code.

IRS Proposes Updated Mortality Tables
"[M]ost plan sponsors could continue to choose one of two standard mortality tables, either generational or static, that would be updated with new base mortality rates and projection factors. The static tables would also have updated projection periods. Plan sponsors that want to use plan-specific mortality tables would also have updated tables ... The current requirement that a plan have at least 1,000 participant deaths within two to five years in order to use custom tables would change to at least 100 deaths."
Pensions & Investments


Techniques to Enhance Your 401(k) Plans

Sponsored by Lorman and BenefitsLink

Jan. 31 webinar. Fiduciary process and techniques of automatic enrollment, auto escalation, re-enrollment, Qualified Default Investment Alternatives, hiring and monitoring of service providers, benchmarking, investment due diligence, regulatory issues.

A Road Map for Effectively Managing a Frozen Pension Plan (PDF)
"This paper provides a four-step road map for deliberate sponsors who want to implement an effective strategy for managing their frozen pension plan -- with the goal of either terminating the plan or managing costs and risks over a longer time horizon."
Bank of America Merrill Lynch

Three Ways to Help Improve Participants' Retirement Outcomes in a Lower-Return World
"Plan sponsors face a stark choice once they have acknowledged the outlook for lower returns. They can stay the course -- with participants contributing at their current deferral rates, often into relatively undiversified portfolios. Alternatively, they can take action to help improve retirement outcomes: encourage participants to save more; consider investment strategy options that can make portfolio diversification easier; and provide participants with the opportunity to enhance returns through the use of active management."
J.P. Morgan Asset Management

Americans Are Putting Billions More Than Usual in Their 401(k)s
"On average, workers in 2015 put 6.8 percent of their salaries into 401(k) and profit-sharing plans, according to a recent survey of more than 600 plans. That's up from 6.2 percent in 2010 ... An increase in retirement savings of 0.6 percentage points might not sound like much, but it represents a 10 percent rise in the amount flowing into those plans over just five years, or billions of dollars. About $7 trillion is already invested in 401(k) and other defined contribution plans[.]"

Working Longer: The Problem with This Boomer 'Retirement Plan'
"More than one-third of boomers (39 percent) envision a gradual glide out of the workforce ... Almost three-fourths of workers (72 percent) said their employer is supportive of employees working past age 65. But when asked about specific policies that would enable continued work, the frequencies were much lower: 20 percent of employers will accommodate flexible work arrangements and schedules; 20 percent would enable workers to shift from full-time to part-time; 12 percent let employees take positions that are less stressful or demanding; 9 percent provide information about 'encore' career opportunities."
CBS MoneyWatch

New York Teamsters May Have Their Pensions Cut, So What Went Wrong?
"[T]he Teamsters fund was hurt badly by the steep market decline of 2008. Those overseeing the fund also tie its troubles to the decline of unionized employment in the trucking industry, which has translated into fewer contributions to the plan.... But an examination of the fund identified other pernicious forces: most notably, illiquid, opaque and high-cost investments. At least 40 percent of the fund is in so-called alternative investments, including expensive private equity deals, hedge funds and real estate. For a fund poised to suspend benefits, holdings like these are especially problematic."
The New York Times; subscription may be required

Proposed Multiemployer Composite Plans: Background and Analysis (PDF)
19 pages. "The composite plan proposal is the third element of a proposal by representatives of an organization of multiemployer pension and health plans to reform multiemployer DB pension plans.... Retired participants in composite plans would receive monthly benefit payments. However, the benefit amounts could increase or decrease, depending on the investment experience of the plan. The composite plan proposal contains a procedure to address situations in which plan assets fall below 120% of plan liabilities, such as could occur if there were investment losses. This realignment program includes proposed, though not mandatory, contribution increases and mandatory benefit reductions." [Report R44722, dated Dec. 29, 2016]
Congressional Research Service [CRS]

Questionable Pension Asset Management Practices
"The New York State Teamsters Pension Fund is a multi-employer pension plan which is failing.... [It] appears that (a) opacity; (b) fees and expenses; and illiquidity, conflicts of interest and related risks, all have dramatically increased as the Fund's financial condition worsened -- all contrary to prudent fiduciary practice. In our experience, such a trifecta of imprudence is all-too-common among failing pensions."

Pension Finance Update, December 2016
"[If] you followed daily market movements, 2016 was a harrowing ride, which saw funded status decline by 7% in the first half of the year before improving 8% in the second half. For the $2 trillion pension market in the US, this amounts to a loss of about $150 billion through June that was completely erased by year-end. Given that total corporate profits of US companies are about $1.5 trillion, and that many leading companies no longer sponsor pension plans, these are prodigious swings."
October Three Consulting

Corporate Pension Plan Funding Levels Showed Little Change in 2016
"[T]he pension funded status of the nation's largest corporate plan sponsors remained essentially unchanged at the end of 2016 compared with the end of 2015, as lower interest rates, which push up liabilities, negated positive stock market returns ... [T]he aggregate pension funded status is estimated to be 80% at the end of 2016, compared with 81% at the end of 2015.... [T]he pension deficit is projected to have increased $17 billion to $325 billion at the end of 2016, compared to a $308 billion deficit at the end of 2015."
Willis Towers Watson

Pension Obligation Bonds No Long-Term Fix for Public Pensions (PDF)
"Bond proceeds have been most frequently used to shore up pension funded ratios, effectively substituting a debt for a pension liability.... [S]tructural pension reform [is] the most prudent and creditworthy approach to addressing the growing liability, and the issuance of POBs can be merely a tactic that delays a long-term solution."

Benefits in General

Discover What Your Peers Are Discussing on Our Newly-Enhanced Message Boards
Use the free, newly enhanced BenefitsLink message boards to pose questions to your peers and pick up tips and information. We think you'll be pleased with a new All Activity page that displays topics that are new or that contain recently added messages. To start a topic or to post a message to an existing topic, you'll need to register now or use the Sign Up button if you haven't registered before. But, as always, you can view already-posted messages without registering first. Take a look!

Executive Compensation and Nonqualified Plans

Top Executives Get Performance Bonuses Despite 'Tepid Growth'
"More than one-third of the companies polled (36 percent) expect to pay annual bonuses that exceed 110 percent of target. Roughly the same number (35 percent) anticipate paying bonuses at 90 percent of target or below. The remainder (29 percent) expect to pay annual incentives close to target."
Society for Human Resource Management [SHRM]

Press Releases

LHD Retirement Advisors Certified for Fiduciary Excellence
Centre for Fiduciary Excellence [CEFEX]

Connect   LinkedIn logo   Twitter logo   Facebook logo, Inc.
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
(407) 644-4146

Lois Baker, J.D., President
David Rhett Baker, J.D., Editor and Publisher
Holly Horton, Business Manager

BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2017, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.

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